STOCK MARKET WATCH, Friday 16 April

[ozymandius]

Friday April 16, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 283
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 126 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 179 DAYS
WHERE ARE SADDAM'S WMD? - DAY 393
DAYS SINCE ENRON COLLAPSE = 875
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL ON April 15, 2004

Dow... 10,397.46 +19.51 (+0.19%)
Nasdaq... 2,002.17 -22.68 (-1.12%)
S&P 500... 1,128.84 +0.67 (+0.06%)
10-Yr Bond... 4.40% +0.02 (+0.46%)
Gold future... 398.30 -2.20 (-0.55%)

DOW..........................NASDAQ.......................S&P

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[ozymandius]

1. WrapUp by Martin Goldberg

Homebuilder and GSE Stocks - Technical Evidence Suggests Top Is In

The homebuilders have had a bull market of historic proportion. From early 2000 at the time of the bursting of the technology and telecom bubble, homebuilders as measured by the Dow Jones Home Construction Index, have increased in stock price by over 300%. Before that time the index was in a bear market. If you are a bull in this sector, you may be asking yourself, “How could the stock market have mis-priced these stocks before the homebuilder bull market?” Those such as myself who are bearish on the sector would have to ask, “When will the mania end?” Based on technical evidence, those with long positions and sitting on long-term capital gains may want to consider hitting the “sell” button. In tonight’s article I will present evidence that indicates that the bull market for both homebuilders and the related Government Sponsored Enterprises (GSE’s) may end soon.

<cut>

Last 6 Months - Emotionally Charged, but Not a Picture of Health

If we examine the most recent 6-month timeframe of representative members of the homebuilding sector, we find that this is no longer a picture of health. Of the six stock charts illustrated, three of them show a clear “double-top” formation – Beazer, Hovnanian, and Ryland Homes. (Hovnanian is tracing a longer-term descending triangle, described below.) NVR Homes is tracing out a clear descending triangle, practically always a bearish technical pattern if broken. It has also shown technical weakness just after the New Year. The two strongest of the illustrated homebuilder stocks – Centex and Toll Brothers are nearing important support/resistance lines, at 50 and 42.5, respectively. Breaking into these support areas in a decisive way will spell more trouble for the sector. Note how all of the homebuilder stocks have recently violated their respective 50-day moving averages for the third time. This is not a good sign.

Fanny and Freddie – Weakness Indicated

The Government Sponsored Enterprise (GSE) stocks are showing weakness. Freddie Mac (FRE) is showing more weakness than Fannie May (FNM). For completeness, the chart of Fannie May follows. Fannie is showing distribution and a potential head and shoulders pattern.

Last Word - What Could Go Wrong

My analysis clearly shows technical weakness in the homebuilders and GSE’s. So is there a ton of money to be made on the short side? As anything in technical analysis, no opportunity has a 100% probability. The game is similar to counting cards at the blackjack table. You only can put the odds in your favor. You cannot be right all of the time (that is why there are stop losses). What can prove this analysis wrong? The historic bull market in homebuilders and GSE’s was supported by the Fed’s lose money policy and corresponding bull market in bonds. Similarly, the recent thrashing of the bond market on the threat of higher interest rates from the Fed is presently driving the weakness in the homebuilder stocks. So what can go wrong for homebuilder bears?

http://www.financialsense.com/Market/wrapup.htm

[ozymandius]

2. Good morning Marketeers!

:donut: :donut: :donut: :donut: :donut: :donut: :donut:
I see more clouds than sunshine in today's economic news. While the bond market is getting trashed, stocks offer little shelter. So without a cloud in the sky today I will carry an umbrella.

My day is starting early. My son and I are almost out the door. That being said - I wish you all a wonderful day at the Casino.



Ozy :hi:

[Frodo]

3. Awfully strong housing numbers

Don't expect to see that for much longer.


Back over 2Million housing starts (expected 1.9 and a slight upward revision of last month's numbers).

About 1.95Million permits (expected 1.9 and a very slight downward revision from last month).

[JNelson6563]

4. last gasp?

I agree Frodo, I think this is a last big push. Rate hike fears are growing.

We'll see.

Julie

[54anickel]

8. Let's hope so, but remember the 80's?

A lot of homes and entire mini-communities being built on spec, ahead of any sale. Towns and villages go through a lot of planning for these types of developments running water and sewer lines figuring the increased property tax revenues will pay for those costs.

That puts legal pressure on the contractor to finish his development. If the contractor goes under (like in the 80's) you end up with these 1/2 completed developments and the cost of those improvements having to be covered by raising the taxes on whatever was existing/finished.

I was living in AZ at the time of that fiaso where there were lots of 1/2 finished developments and and homes. Then the foreclosures started hitting as well. You could get a newly finished home for pretty cheap, but the former owners had generally gutted the place and sold the plumbing fixtures, cabinets, whatever they could rip out before being tossed out. It was a bad time.

[Frodo]

11. Well.... I wouldn't say "last gasp".

We're just not going to see a lot of these record breaking months. We could easily drop back over the next year or two to around 1.4-1.7 Million range. Nothing wrong with that (we spent just about the entire Clinton administration in that range), it just isn't record-breaking.

Yes, this is a "last great push" (not on the part of sellers so much as buyers) to get in while the getting is good, but it's going to take a lot more than a point or two in to dry up housing demand.

[JNelson6563]

23. The bubble is fully exteneded

All bubbles pop sometime. This has been a bubble that has been crucial to the economy and I think it's at the end of it's life.

With credit so over-extended I am hard pressed to see what will prop things up when this pops.

Julie

[Frodo]

25. I disagree (surprise?)

There really isn't such a thing as a "housing bubble" on a national level. Nothing like what happened to the Nasdaq is going to happen to the housing market.

Sure, there are plenty of individual markets where housing is drastically over-extended, and that truly does fit the "bubble" psycology, but not real-estate in general.

The difference? The Nasdaq (or at least the .coms that crashed) had no REAL value, only a percieved value. Housing has both. Real people live in real houses, there just aren't millions and millions of empty houses being purchased on wild speculation.

Housing prices are going to stop going up like a rocket... and MAY even drop a few percent (with the occasional mini market tumbling and a few markets that continue upward) - though I think it's more likely that it will just slow down to 0-3%/yr for the next few years.

[54anickel]

30. "Individual markets where housing is over-extended" sort of like

when it was only the technology sector that was over-valued. Yet the meltdown was not isolated to the Nasdaq alone, was it?

What's the latest fad being touted in those late night get rich quick infomercials (besides day trading)? Real estate. Isn't that what usually happens in sectors that are getting ready for a meltdown - find new blood to dive in for the get rich scheme?

It was over 2 years ago that there were op/ed pieces running almost weekly stating Greenspan was going to try to reflate the economy in housing. If we've learned anything about Greenspan it is that he takes reflation to the far extreme.

[Frodo]

45. Response.

Yet the meltdown was not isolated to the Nasdaq alone, was it?

Yes, it was.

You don't have a right to make money every year in the market. And a 10% or 20% or 30% down year is NOT the bursting of a "bubble" and it isn't a "meltdown".

What's the latest fad being touted in those late night get rich quick infomercials (besides day trading)? Real estate.

Um yeah... if your definition of "latest" includes several decades. it certainly isn't just the alst few years.

It was over 2 years ago that there were op/ed pieces running almost weekly stating Greenspan was going to try to reflate the economy in housing. If we've learned anything about Greenspan it is that he takes reflation to the far extreme.

Really? We've "learned" that? When? During the years of his reign at the Fed inflation is lower than at probably any other similar timeframe. When has he reflated to the "far extreme"?? Keep in mind that he was Fed chair for the entire Clinton administration.

[54anickel]

46. I was wondering when you were going to throw that back. What took ya

so long? :evilgrin:

Yes, Greenspin was chair during Clinton. Have you ever heard me sing praises of the Clinton years here? So what? His reflating during those wonderful Clinton years helped to cause that bubble. And it was I believe Rubin who came up with the idea of having foreign surpluses being used to buy our debt, but I've posted that whole story here before.

Would love to get into it with you, but it's 80 degrees and sunny in WI on a Friday evening, that means dust off the bikes and head for a fish fry.

[Frodo]

47. I'm a bit slow replying...

...when people are paying me to do something ELSE.


Enjoy the fish.

[UpInArms]

5. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 90.33 Change +0.27 (+0.30%)

related article:

http://www.channelnewsasia.com/stories/afp_world_business/view/80317/1/.html

Dollar keeps up pressure on euro, yen amid US interest rate talk

LONDON : The dollar kept up the pressure on the euro and yen ahead of fresh US data that could add to expectations of a hike in American interest rates soon, dealers said.

The single European currency stood at 1.1958 dollars from 1.1961 late on Wednesday in New York.

The dollar was being traded at 108.62 yen from 108.59 on Wednesday.

US weekly jobless claims figures along with manufacturing and consumer confidence data to be published later Thursday were expected to be scrutinised for further signs that a hike in US interest rates could be just months away.

"The upbeat economic news is set to continue... but market reaction is likely to be limited in the face of sharp moves (in the dollar) over recent days," Credit Agricole Indosuez economist Mitul Kotecha said.

A raft of robust US data, including jobs figures, retail sales and inflation, has propelled the dollar in recent days and given rise to expectations of a rise in US interest rates from a 46-year low of 1.0 percent.

"After the series of very strong economic releases of the past few days, rate hike talks have come back into fashion and a confirmation of improving labour market in the latest claims figures would make most of the headlines today," Canadian Imperial Bank of Commerce economist Audrey Childe-Freeman said.

Tokyo-Mitsubishi economist Derek Halpenny said the market was now pricing a quarter- point increase in the federal funds rate in August and further moves by the end of the year following robust US retail sales figures and stronger-than-expected inflation data published earlier this week.

The dollar becomes more attractive to foreign investors if US interest rates rise because they gain higher returns on dollar-denominated assets.

...more...

The March PPI report is showing no signs of appearing :shrug:

http://www.bls.gov/ppi/delaynotice.htm

Status of March 2004 Producer Price Index

The Bureau of Labor Statistics has not yet scheduled a revised release date for the March 2004 Producer Price Index (PPI), originally scheduled for April 8, 2004. When a revised release date is determined, it will be announced at least one day ahead of time on this web page and through a news advisory.

The release of the PPI for January 2004, originally scheduled for February 19, was delayed to March 18. The February 2004 PPI, originally scheduled for release on March 12, was delayed to April 1. The delay of the January PPI was caused by unexpected difficulties in the conversion from the Standard Industrial Classification system to the North American Industry Classification System; the January PPI delay disrupted the normal Producer Price Index production cycle, and as a result, the February and March releases have also been delayed.

BLS expresses its sincere apologies to those who have experienced any problems as a result of these delays.

Last Modified Date: April 5, 2004

and here's a bit from The Daily Reckoning:

The prevailing illusion is that Alan 'Bubbles' Greenspan
has pulled it off. He came in with just what the market
needed just when it needed it - more money and credit.
(Some might say that he always comes with more money and
credit, whether the market needs it or not.)

Interest rates at 1% (less than the inflation
rate)... .money supply (M3) ballooning by $1 trillion in a
single year... hey, is it any wonder stocks rallied and real
estate soared?

But for the longest time, it looked as though all
Greenspan's money could not buy the happiness of a thriving
economy. Admittedly, many new jobs were created - but in
China and India! And even a flood of new money failed to
float prices higher. It was beginning to look to many
economists as though there was something really wrong,
after all.

What a relief the news from the last 10 days has been.
Jobs, profits... and now inflation - what more evidence do
we doubters need? Greenspan is a genius after all. What
crackpot spoilsport can still deny it?

Have a Great Day Marketeers! :hi:

[Zynx]

6. Bad Industrial Production Numbers

http://federalreserve.gov/releases/G17/Current/default.htm

They were weak in all categories. Industrial production is perhaps the best of the coincident indicators of economic activity and this is a bad sign.

[UpInArms]

7. Treasurys extend gains on weak March industrial output

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38093.3966435185-813700534&siteID=mktw&scid=0&doctype=806&

NEW YORK (CBS.MW) -- Treasury prices extended their gains Friday after the release of weaker-than- expected U.S. March industrial production data. The Federal Reserve reported that industrial production unexpectedly fell 0.2 percent in March after strong gains the previous two months. Capacity utilization fell to 75.5 percent from 75.7 percent, the first decline since June. Economists were expecting production to rise 0.3 percent and capacity utilization to increase to 76.8 percent. The 10-yr note was last up 13/32 at 97 7/32, yielding 4.347 percent. The price moved higher early in the day after Fed Gov. Ben Bernanke said inflation could remain under wraps, pushing yields back from the year's highs hit earlier this week, above 4.40 percent.

[UpInArms]

9. Consumer Sentiment preliminary numbers

U.S. APRIL UMICH CONSUMER SENTIMENT 93.2 VS 95.8 MARCH

[UpInArms]

10. Market Numbers at 9:50 EST

Dow 10,391.22 -6.24 (-0.06%)
Nasdaq 1,987.01 -15.16 (-0.76%)
S&P 500 1,127.67 -1.17 (-0.10%)
10-Yr Bond 4.348% -0.054

[UpInArms]

12. no interest rate hike in sight (surprised? NOT!)

http://www.forbes.com/personalfinance/funds/newswire/2004/04/16/rtr1334664.html

Dollar higher, but pares gains on Broaddus

NEW YORK, April 16 (Reuters) - The dollar rose against the euro on Friday but pared gains after a Federal Reserve official cast a note of caution about the possibility of a Federal Reserve rate increase in the near term.

Richmond Federal Reserve President Alfred Broaddus said that he thought the Fed is some distance from seeing conditions for a rate hike. Broaddus added that he was not "unduly concerned" about the risk of a near term inflation surge, adding that he still saw "considerable" slack in the U.S. economy.

The dollar pared some of its earlier session gains against the euro in the wake of the remarks.

"Broaddus is basically saying a rate rise is some distance away, and that is providing some impetus for small dollar selling," said Mike King, trader at Societe Generale in New York.

The market is closely focusing on remarks of Federal Reserve officials for hints on the timing of an interest rate rise as well as more U.S. data reports due to be released on Friday, analysts said.

The dollar paused on Friday after racing to four-and-a-half month highs versus the euro this week as investors suspected the greenback's rally on prospects of higher interest rates might have run out of steam.

...more...

[Zynx]

13. There is actually a real inflation risk.

However, increasingly inflation is in areas rate hikes wouldn't do anything about such as health insurance and energy. Still, because this is inflation despite what the fed says, they should raise rates because they are far too low and well below the current rate of inflation which ran at a 5.1% rate in the first quarter.

[54anickel]

15. I don't understand why the markets are "closely focusing on remarks

of Federal Reserve officials for hints". It ain't gonna happen before the election.

[UpInArms]

16. but the "markets" expect "rational" decisions

and have been slow on the uptake (imho) that this mal-administration and its minions are completely acting within the Machiavellian {see http://www.infoplease.com/ipd/A0524702.html for info} mode.

I understand how difficult it is to accept that logic, law and reason has been suspended in this moment of our world, but it is necessary to do so in order to see the patterns at work.

So, we can only attempt to unravel the design and look to see where it all will lead.

[54anickel]

18. That link reads like this mal-adminstrations business plan and mission

statement. It's probably engraved on a plaque in Shrub's office. If it's not, it should be.
Maybe we should take up a collection to send him one.

[54anickel]

31. Is Greenspan being political?

http://www.dodgeglobe.com/stories/122003/opi_1220030069.shtml
Story last updated at 11:37 a.m. Saturday, December 20, 2003

Baker: Who to blame when the next bubble bursts

snip>

Where does Greenspan fit in?

He has promoted the housing bubble by reassuring people in public statements that there is no bubble. He also helped drive mortgage interest rates to 40-year lows earlier this year -- allowing people to spend more money on houses, which adds to price inflation and to the bubble.

The health of the economy will be the key to George W. Bush's re-election. Over the last three years, the housing market has been the driving force in the economy. Greenspan appears determined to have it keep playing that role as long as possible. But the bubble will eventually burst, leading to another recession and destroying the main source of savings for tens of millions of families. Could a responsible public official possibly pursue such a policy?

When President Bush's first tax cut was being debated before Congress in January 2001, the public anxiously awaited Greenspan's views. He told Congress that the tax cuts were a good idea and that he was worried that without them the budget surpluses would be too large and that the government would pay off the national debt too quickly.

Three years later, we face huge budget deficits. There is no reason to ask whether Greenspan -- who doesn't have to answer to anyone -- would pursue a destructive economic policy for political reasons because he has already done so.

[54anickel]

14. The Face of Deflation - Interesting take on it

:shrug:

http://www.gold-eagle.com/editorials_04/riley041504.html

For the past couple of years, the Fed and Wall Street have been denying the existence of deflation. Deflation is the worst economic scenario, so it is no surprise that they turn a blind eye publicly even when they are furiously working behind the scenes to prevent it and control it.

One of the ways of denying deflation is to strictly define it only as "a pervasive and constant price decline in all areas of the economy caused by a reduction in credit available or the money supply." While this is one definition, it is not the only definition.

Deflation starts out in the corporate area with a deflation of profits. It then goes to revenues and lastly causes price declines. We have already seen profit deflation and revenue deflation and some industries are experiencing price deflation.

We have also seen a reduction in available corporate credit, but not to a great degree.

The mainstream would have us believe that deflation will show up in a declining GDP and negative inflation numbers. While this is a result of deflation at its worst, it is not the only way to tell you have deflation.

more...

[Frodo]

19. I'll remind you of a couple posts we traded a couple weeks ago.

Seems there are still some hunting around warning of deflation. Though I don't agree with his definition of deflation, it does raise an interesting question.

Whatever "Deflation" and "Inflation" ARE... you can't have horrible waves of BOTH at the same time. WHICH are we in for? Or is it possible we're walking a very fine edge between the two?

[54anickel]

22. By using the effects, rather than the econ 101 definition of

inflation/deflation I believe you can have both at the same time. Did Japan start out with the classic idea of spiraling ever downward prices as people put off their purchases knowing the prices would be headed lower? If I remember correctly it started out with the "deflation" of the stock market, followed by real estate valuations while prices of consumer goods and commodities were still high.

As far are the econ 101 definitions, we are in inflation right now as never before with M3 still rising. The money supply should begin to deflate once write-offs exceed money creation (is that possible with Greenspan at the helm).

But exactly where do derivatives fit in? It is derived wealth, Greenspan himself has stated they add to the liquidity. Do they figure into the broad M3 measure of the money supply? Nobody want to let on to the specifics of those beasts.

[54anickel]

17. March Industrial Production in U.S. Declines 0.2% (Update2)

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aIjPNfqbfyB4&refer=home

April 16 (Bloomberg) -- U.S. industrial production unexpectedly dropped 0.2 percent in March, the first decrease in 10 months, as factories made fewer cars and warm weather depressed utility output, a report from the Federal Reserve showed.

snip>

``It really is held down by utilities, and that is just a weather effect,'' said Robert Mellman, an economist at J.P. Morgan Securities in New York, the only firm to correctly predict the 0.2 percent drop. ``Auto production was down, and that should be back up in April. All business surveys suggest the economy is doing very well.''

snip>

Production of autos and parts dropped 2.2 percent after gaining 2.1 percent the previous month. The decrease was the first since a 2.3 percent drop in October. Excluding autos and parts, manufacturing production rose 0.1 percent following a 0.8 percent increase in February.

snip>

Business equipment production, which includes transportation and information processing gear, fell 0.2 percent in March after increasing 1.6 percent the previous month. Production of technology goods, such as computers, communications products and semiconductors, rose 1.4 percent last month after a 3.4 percent gain in February.

Production of non-durable consumer goods, which include food, clothing and paper products, dropped 0.3 percent in March after climbing 0.4 percent the previous month.

more...

[54anickel]

20. Greenspan Says Care Needed in Rewriting Rules for Investment

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aRGUP9GsNrpE&refer=us

April 16 (Bloomberg) -- Wall Street regulators should punish wrongdoing while also avoiding over-regulating financial markets, Federal Reserve Chairman Alan Greenspan said.

``Some practices and rules have outlived their usefulness and require updating,'' Greenspan added. ``But in so doing we need to be careful not to undermine the paradigm that has so effectively governed voluntary trade. Rewriting rules that have served us well is fraught with the possibility for collateral damage.''

Greenspan, 78, said reputation and integrity have been historically important to Wall Street firms.

``Recent allegations on Wall Street of breaches of trust or even legality, if true, could begin to undermine the very basis on which the world's greatest financial markets thrive,'' Greenspan said in the text of prepared remarks to a financial markets conference sponsored by the Federal Reserve Bank of Atlanta. ``Guilty parties should be expeditiously punished.''

more...

edit to add - bit more here

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1082118673-9e32d306-24980

snip>

"Recent transgressions in financial markets have underscored the fact that one can hardly overstate the importance of reputation in a market economy," Greenspan said in his brief introductory remarks. A copy of his speech was made available in Washington

"The plethora of laws of the past century have not eliminated the less-savory side of human behavior," Greenspan said. The most effective punishment, he said, is often the merciless hand of the market that shuns all contact with the dishonest among us

Laws and rules have their place, he said. "Guilty parties should be expeditiously punished. Some practices and rules have outlived their usefulness and require updating," he said

"But in doing so we need to be careful not to undermine the paradigm that has so effectively governed voluntary trade," Greenspan said. "Rewriting rules that have served us well is fraught with the possibility for collateral damage."

[UpInArms]

21. market numbers at 10:49 EST

Dow 10,407.83 +10.37 (+0.10%)
Nasdaq 1,991.88 -10.29 (-0.51%)
S&P 500 1,130.62 +1.78 (+0.16%)
10-Yr Bond 4.343% -0.059

dollar

Last trade 89.91 Change -0.15 (-0.17%)

[54anickel]

24. Survey: College Finance Students Like Bush and Greenspan, Majority Predict

Upswing in Dow Jones Industrial Average

Oh my, these are our future leaders. :scared:

DAYTON, Ohio, April 13 /U.S. Newswire/ -- If college students from more than 100 schools across the nation are any predictor, President George W. Bush will have another four years in office.

A University of Dayton survey of 403 finance students shows 61 percent believe Bush will be re-elected this November, while 39 percent say he will not.

Students also gave high marks to Alan Greenspan, Federal Reserve Board chairman, as 94 percent gave him an A or B for his work.

The survey covered everything from what sectors will be the top performers in 2004 to where the Dow Jones Industrial Average will be at the end of the year. The majority say it will go up.

[UpInArms]

26. market numbers at 12:19 EST

Dow 10,443.46 +46.00 (+0.44%)
Nasdaq 2,002.22 +0.05 (0.00%)
S&P 500 1,135.21 +6.37 (+0.56%)
10-Yr Bond 4.348% -0.054

dollar

Last trade 89.61 Change -0.45 (-0.50%)

[54anickel]

27. Dollar Gains; Snow Says Economic Growth Might Lift Tax Revenue

Ha-ha-ha-ha-ha! Please Snow, stop! You're killin' me here!!!

http://quote.bloomberg.com/apps/news?pid=10000102&sid=amO7lyn4fUJE&refer=uk

April 16 (Bloomberg) -- The dollar rose against the yen in London, heading for its second winning week, after U.S. Treasury Secretary John Snow said stronger economic growth may lift tax revenue and reduce the government's borrowing needs this year.

``Government receipts are coming in stronger -- that is what you would expect for an economy performing as well as this one,'' Snow said yesterday in an interview. The Bush administration projects a record deficit of $521 billion in fiscal 2004, which ends on Sept. 30.

``The U.S. economy will continue to expand, helping to reduce its fiscal deficit and supporting the dollar,'' said Koji Fukaya, chief analyst in Tokyo of the foreign exchange and treasury division at Bank of Tokyo-Mitsubishi Ltd.

snip>

The dollar's gain may accelerate should it breach 109.30, where automatic orders to buy the dollar and sell the yen have been placed, according to Tsutomu Soma, a currencies and derivatives trader at Okasan Securities Co. in Tokyo.

more...

[UpInArms]

28. US economic rebound on track despite poor reports

(The comedians are out in full force today)

http://www.forbes.com/business/newswire/2004/04/16/rtr1334862.html

NEW YORK (Reuters) - U.S. industrial production unexpectedly dropped in March while consumer sentiment slipped this month, but economists downplayed the two disappointing reports and said the economy's solid expansion remains on track.

Strong reports this week on regional factory output and retail sales have boosted forecasts for overall economic growth in the first half of the year. Some economists are now looking for gross domestic product of 5 percent, up from the 4.1 percent pace in the fourth-quarter.

Yet Federal Reserve officials have sought to play down worries they will be eager to lift official interest rates from 46-year lows in response, even with an surprising jump in consumer price inflation in March.

Industrial production dipped 0.2 percent in March. Most of the fall came at utilities due to "unseasonably warm weather," the Fed said.

That was bellow forecasts for a 0.3 percent rise but followed a big 0.8 percent gain in February. Excluding utilities, factory output was flat on the month. Capacity utilization, a key indicator of how much of the country's production resources are being used, slipped to 76.5 percent in March from 76.7 percent, keeping it well below its long-term average.

...more...

[54anickel]

29. The Anatomy of Growth

Long, but interesting read.

http://www.mises.org/fullarticle.asp?control=1491&id=67

snip>
To make this more immediate, look at what those who read the financial press, listen to the business news, or follow the knockabout of politics, should recognize as what passes for popular wisdom today:

/snip> Then it goes on to dispute a long list of what been reported in the media as signs of a recovery and the wonderful fiscal policies that are being credited for that recovery.

snip>

Thus, the artificial boost delivered by a 25% currency devaluation, negative real interest rates, and a $500 billion budget deficit might yet dissipate itself in a variable and inherently unpredictable rise in costs. This will dash any entrepreneur's hopes of securing healthy gains from the rise in the prices he expects to receive.

If so, it will usher in a renewed stagnation in production—a stagnation which, remember, will be partially disguised by the helpful inflationary effects of government fiscal and monetary policy for a few fortuitous industries.

If this is not to lead to a commensurate reduction in consumption, it can only be offset by recourse to yet more credit, credit presumably built on further asset price inflation, especially in the housing market (if the Fed is lucky).

Indeed, to keep this game going will require a good deal of finesse, another large dose of disingenuousness regarding inflation and—you may want to underline this—a further period of inordinate laxity in setting interest rates.

Therefore, the overriding imperative to avoid a housing implosion, coupled with the self-imposed erosion of America's competitive edge on the world labor market, seems almost to guarantee that policy, both here and abroad, will stay too loose for too long in the vain belief that this will ease the problems caused by previous policy that was too loose for too long!

Thus, the likelihood is that the development of full-blown symptoms of an inflationary excess across much of the globe is presently as much of a certainty as anything in this volatile world with its top-heavy, distortive, and unstable monetary system can ever be.

Pessimists—especially the foreign variety who have investments tied up in the US—will here find resonance in the words of the Yankee treasury secretary, Henry McCulloch, quoted by Henry Hazlitt in The Inflation Crisis and How to Resolve it:

"It is corrupting the public morals. It is converting the business of the country into gambling and seriously diminishing the labour of the country. . . . Men are apparently getting rich while morality languishes . . . . Upon the demoralizing influence of an inconvertible government currency it is not necessary to enlarge. . . . It is not to be expected that a people will be more honest than the government under which they live, and while the government of the United States refuses to pay its notes according to their tenor . . . it practically teaches the people the doctrine of repudiation."

more...

[54anickel]

32. 1:33 update

edit for html

Dow 10,440.33 +42.87 (+0.41%)
Nasdaq 2,001.34 -0.83 (-0.04%)
S&P 500 1,134.54 +5.70 (+0.50%)
30-yr Bond 5.186% -0.019

NYSE Volume 910,230,000
Nasdaq Volume 1,214,011,000

1:30PM: Equities back off their best levels but retain most of their recent gains... The stock market has staged a respectable turnaround effort especially considering how weak the after hours session was last night... Traders were frustrated with the bulk of most earnings reports - not necessarily because the numbers were disappointing, but because they realized that the days of 'easy year/year comparisons' were over... High double-digit growth rates might become a thing of the past as the market prepares to lap the gains of last year...
That fact, combined with the likelihood of a Fed tightening by year-end, has kept buyers wary to commit new money...NYSE Adv/Dec 2432/785, Nasdaq Adv/Dec 1737/1326

1:00PM: Market's advance grows legs as the Nasdaq finally makes decent headway into positive territory... The participation of more tech sectors in the rally has boosted the prospects of its survival, and sent the blue chip averages to new highs... Breadth figures are now positive at the Nasdaq, and up volume leads down volume by a decent margin... The indices are now poised to make a decent dent in the losses accumulated during Tuesday's sell-off... The Dow is currently poised to close somewhat higher for the week, whereas the S&P 500 and especially the Composite still have a ways to go...NYSE Adv/Dec 2326/863, Nasdaq Adv/Dec 1582/1452

[KoKo]

33. Just popped in for a minute. Still trying to track down more

info on Rothschild's getting out of the Gold hedging. Hope more info and analysis will come out over the weekend. So far it's only the "press release" from the Company (Ha! the "company") with no analysis in the British press. Maybe the Gold Bug sites will digest it over weekend.

Busy preparing for NC Dem Caucuses tomorrow. Repugs forced caucuses on us here with a Primary delayed until July 26th! Anyway, gonna be standing with some others with petition for money from party for funding for grassroots candidates and outreach and hopefully voting for Dean/Kucinich delegates to go to convention to impact the platform.

Pledge of honor: I support Kerry! Just gotta keep working for the "angry left," so that our voices are heard.

:hi:

[54anickel]

36. You go KoKo! We need that "Angry voice from the wilderness". I've

been doing some digging on it as well. We will have to see what the gold-bugs think about it. Right now all I can tell is that there just isn't any money to be made in hedging anymore as the miners are reducing their hedge books due to the rising cost. Also seems Rothschild just doesn't want to be in the trading market since it's so volatile - hedging was a fixed bet for them. Can't blame them for that one.

So there's an empty seat on the 5 member board that will be filled by some as yet unknown. The London price fixing board will carry on, just without Rothschild.

I've got a couple of articles bookmarked to digest over the week-end.

[54anickel]

34. 2:48 numbers

Dow 10,449.91 +52.45 (+0.50%)
Nasdaq 2,000.81 -1.36 (-0.07%)
S&P 500 1,135.09 +6.25 (+0.55%)
30-yr Bond 5.186% -0.019

NYSE Volume 1,090,872,000
Nasdaq Volume 1,414,075,000

2:30PM: The day's tug of war continues as the market approaches the high-end of its range... Volume has run at a fairly moderate rate, leaving the indices prone to a certain amount of choppiness and preventing them from trading in one pattern... Semiconductor refuses to participate in the advance and continues to trade in negative territory... PMC-Sierra (PMCS 15.73 -0.89) has gotten slammed today following its Q1 (Mar) report...
Despite beating the consensus estimates (that were revised higher following its upside preannouncement) and guiding Q2 (June) revenues in line, the stock has plunged in a 'sell the news' response...NYSE Adv/Dec 2395/861, Nasdaq Adv/Dec 1667/1433

[UpInArms]

35. market seems to lose traction at 3:04 EST

Dow 10,425.64 +28.18 (+0.27%)
Nasdaq 1,993.95 -8.22 (-0.41%)
S&P 500 1,132.52 +3.68 (+0.33%)
10-Yr Bond 4.354% -0.048

[54anickel]

37. Awww, what happened? Are we back to Friday profit-taking again, not

that there's been much made this week.

[UpInArms]

38. calvary's back - see the cute little spike?

Dow 10,452.89 +55.43 (+0.53%)
Nasdaq 1,998.42 -3.75 (-0.19%)
S&P 500 1,134.77 +5.93 (+0.53%)
10-Yr Bond 4.348% -0.054

[54anickel]

39. They need to send a couple more troops to the Nasdaq and all will

be well.

[54anickel]

40. Check out the 3:00 blather

3:00PM: Stocks once again slip lower as conviction on the part of buyers and sellers is pretty weak... Most traders have headed out for the weekend, and closed positions in fear that terrorist activity could rock the indices on Monday... Worries about rising interest rates have been the theme of this week, with the increase in the yield of the 10-year note on Tuesday effectively diminishing some of the attractiveness of equities and leading to a sell-off that day... Presently, there is nearly a 50/50 chance - according to Fed Fund futures - of an interest rate hike at the Fed's June meeting...

Briefing.com, for its part, does not expect any Fed action until November...NYSE Adv/Dec 2465/795, Nasdaq Adv/Dec 1707/1423

[UpInArms]

41. strange words for Friday

hmmmmm.....

worrying about terrorist attacks that would rock the markets on Monday?

Somebody know something that we don't?

Is this like when Jebbie made his Executive Order on September 7, 2001, citing terrorists attacks to put Florida on emergency footing prior to 9/11?

Think it might be 5:00 somewhere in the world? :beer:

[54anickel]

42. Certainly does seem out of place, doesn't it. I think I'll join ya, but

better make mine a double. :tinfoilhat: :scared:

[54anickel]

43. Islamic countries call summit to discuss U.S.

Keep your eyes on this for next week. It will be interesting to see who all participates.

http://salon.com/news/wire/2004/04/16/muslim_nations/index.html

April 16, 2004 | KUALA LUMPUR, Malaysia (AP) -- The world's largest Islamic organization will hold an urgent meeting next week to discuss rising violence in Iraq and the recent U.S. policy shift on Israel's withdrawal from the Palestinian territories.

Malaysia, the chair of the 57-member Organization of the Islamic Conference, said Friday it expects foreign ministers and members of various OIC committees dealing with Iraq and the Palestinians to attend the extraordinary meeting on Thursday, though officials said the exact number of participants was not confirmed.

In a statement carried by the Bernama national news agency, Foreign Minister Syed Hamid Albar said the meeting's main purpose would be to "discuss current developments pertaining to the Palestine issue, particularly the recent Israeli plan for unilateral withdrawal from Gaza and parts of the West Bank.''

It would also "seize the opportunity to discuss the deteriorating situation in Iraq,'' Bernama reported.

[54anickel]

44. Closing numbers & blather

Dow 10,451.97 +54.51 (+0.52%)
Nasdaq 1,995.74 -6.43 (-0.32%)
S&P 500 1,134.61 +5.77 (+0.51%)
30-yr Bond 5.176% -0.029

NYSE Volume 1,493,061,000
Nasdaq Volume 1,870,585,000

Close: The stock market started on a sour note and steadily improved over the course of the day - never enough, however, to lift the Nasdaq out of negative territory... The Composite will thus finish 2.8% lower for the week as the index was pummeled by selling in tech... A slew of earnings reports from bellwether tech companies failed to impress investors and prompted selling across the board...
The same was true of today as March quarter results from IBM (IBM 92.31 -1.66), Nokia (NOK 14.60 -1.45), PMC Sierra (PMCS 15.66 -0.96), Siebel Systems (SEBL 11.39 -0.2), and Sun Microsystems (SUNW 4.26 -0.16) did nothing for the market... It wasn't so much the quality of earnings as the recognition that 'easy year/year comparisons' are a thing of the past... Companies will face much harder comparisons in the second half of the year, and thus growth rates will slow... That fact held back buying interest in tech and pushed the Nasdaq below the 2000 mark at the close... The blue chips fared much better with interest-rate sensitive issues that got slammed in the beginning of the week bouncing back today... Banking and REIT performed especially well, along with basic material...

Economic data were a mixed bag today with March Housing Starts and Building Permits surpassing market expectations, and March Industrial Production and Capacity Utilization falling short of consensus estimates (please see Briefing.com's Economic Calendar for specific details)... April Michigan Consumer Sentiment was also a disappointment with the preliminary reading declining to 93.2 (consensus of 97.0)...

Have a great weekend everyone :hi: